Successful Negotiations With IMF To Boost Confidence Of Multilateral Institutions

ISLAMABAD, (UrduPoint / Pakistan Point News - 13th May, 2022 ) :The successful completion of IMF-Pakistan reviews, would boost confidence of all stakeholders including multilateral institutions and direct investors likely to bring cost of borrowing down via Sukuk and Eurobonds that's spiked in recent years.

This was stated by Meher Kashif Younis former Senior Vice President Lahore Chamber of Commerce and Industry, while talking to a delegation of women chamber of commerce and Industry led by Ms Minahil Tahir.

He  hoped that remittances were expected to play a significant role in reducing the country's current account deficit due to the fact that the trade balance was expected to remain under pressure this year and domestic demand was viewed to rebound more swiftly.

He said, however, in prevailing scenario, fragile global economic growth and Russia-Ukraine conflict wiould inflict harmful economic impact on Pakistan vulnerable external account outlook in the wake of  major commodities prices dilating and internationally ticking up  monetary tightening.

He said, Pakistan's widening current account deficit (CAD) was putting sustainability at risk, needs immediate steps of reducing nonproductive government expenses, discouraging luxury imports besides encouraging non-traditional exports on top priority.

Meher Kashif Younis said lofty imports bill, primarily owing international commodity prices and domestic demand steered pressure on CAD and the rupee accordingly.

He said price trends had kicked off another "Super cycle" shocking everyone as how long prices would take time to sustained spells of surge tied to a period of rapid development.

He was of the opinion that various other macro aspects such as inflation and current account stayed vulnerable to the evolving situation.

The impact of the energy price shock on the main macroeconomic variables can be inferred through a two-step empirical analysis.

He feared that LNG prices pose another risk to domestic economy following depleting natural gas reserves have intensified pipeline gas imports in recent years .

He said Pakistan needs further incentivizing foreign remittances to amplify it as it became the largest source of capital flows into country and expected to remain case in 2022 he added.

Speaking on the occasion Ms. Rameen said that geopolitical contexts, lifting of containment measures across the regions and economic imbalances aggravated by uneven global recovery, will stay to be main drivers of related flows.

She said likewise, high demand for technology-related services would be beneficial for the country